The Banco de Moçambique (BM) intervenes in the foreign exchange by buying or selling US dollars (USD), in exchange for the domestic currency - the Metical - in the Interbank Foreign Exchange Market.

This intervention is approved by the BM's Board and is compliant with the monetary policy framework, which aims at preserving the domestic currency's value, under the floating exchange rate regime.

Under floating exchange rate regime, banks set the exchange rates to be in effect at given times driven by the market's conditions, where present and prospective foreign currency supply and demand play a key role.

The BM's intervention in the foreign exchange market sets out to:

1. Address disorderly market conditions, resulting from notable imbalances between foreign currency demand and supply in the market that significantly impact exchange rate volatility;
2. Accumulate and maintain an adequate stock of international reserves in order to ensure compliance with the country's international commitments and preserve the confidence in the domestic currency.

The BM may give prior notification of the intervention's dates and amounts, in order to address market instability, as well as accumulate and maintain an adequate stock of international reserves.

In addition, the BM makes known the results of the interventions in the Interbank Foreign Exchange Market.